Climate change impacts and vulnerability in Europe 2016

Multi-sectoral vulnerability and risks
6.4.2 Trade: agricultural commodities
In most parts of the world, the observed impacts of
climate change on terrestrial food production have
been predominantly negative, in particular for maize
and wheat (Porter et al., 2014). Over the past decade,
there have been several periods of rapid food and
cereal market price increases following extreme
weather events in key producing regions, highlighting
the sensitivity of world markets to climate extremes
(Trostle et al., 2011; Nicholls and Kebede, 2012;
Porter et al., 2014). These events have shown that
climatic changes can have substantial consequences
beyond the regions in which they occur through the
global food trade system. Climate-induced changes
in global price levels for food and feed are of great
importance for Europe, which relies to a considerable
extent on imports to meet domestic demand for food
and feed (EEA, 2015). Increasing price volatility could
eventually lead to supply disruptions for agricultural
commodities with high import dependency
(e.g. soybean), whereby price changes for animal
fodder would further affect meat production (Barnett
et al., 2013).
Several recent examples illustrate how climate
impacts on agricultural production outside Europe
(EEA member and collaborating countries) have
affected Europe via regional and global markets and
along international supply chains. The severe heat
wave in Russia in the summer of 2010 destroyed
5.4 million hectares of crops, equivalent to about 30 %
of Russia's grain harvest. This led to an export ban on
wheat by the Russian government that contributed
to an increase of 60–80 % in global wheat prices
(Foresight, 2011; Coghlan et al., 2014). Similarly, a
severe crisis in Australia's rice production in 2008
after six consecutive years of drought contributed,
in conjunction with other factors, to a doubling of
the global market price of rice in 2008 (Stephan
and Schenker, 2012). It is important to note that, in
both examples (Russian wheat and Australian rice),
the observed global price volatilities resulted from
a combination of the extreme weather events and
the associated response measures (i.e. export ban
and hoarding stocks). This highlights the role that
countries and markets play in either amplifying or
managing and minimising the effects of climate
impacts on food supply.
The Mediterranean region in Europe has been
identified as the most susceptible to shocks in the
flow of agricultural commodities, owing to its relatively
high dependence on food imports from regions
outside Europe and the more prominent role of the
food sector in its economy (Barnett et al., 2013).
Moreover, low-income population groups in all parts
of Europe (and elsewhere in the world) are likely to
be disproportionally more affected by food price
volatilities (Porter et al., 2014; Vonk et al., 2015). An
IPCC review of projected climate change impacts on
crop production shows that negative impacts on yields
are assumed to increase during the 21st century,
especially in low-latitude regions (e.g. in Asia and
Africa), and that interannual variability of crop yields
is assumed to increase as well, including in Europe
(see also Section 5.3.4) (IPCC, 2014). Therefore,
Europe's susceptibility to price volatilities of agricultural
commodities and disruptions of trade flows might
further increase in the future.
6.4.3 Trade: non-agricultural commodities
Europe is highly dependent on imports for many key
resources; for example, 59 % of metal ores consumed
in the EU-28 in 2013 were imported (EEA, 2015). This
means that Europe's access to many resources and
raw materials relies on exploitations in other world
regions and associated international supply chains,
which in turn may be significantly affected by climate
change impacts (Nicholls and Kebede, 2012). As seen in
Map 6.5, a substantial number of Europe's major trade
partners (e.g. India, Indonesia, Nigeria and Vietnam) are
estimated to exhibit an overall vulnerability to climate
change ( 122 ) that is larger than in any European country.
For example, primary and manufacturing industries can
be affected by extreme climate events through impacts
on infrastructure or transport (see Section 6.4.4).
An example of an indirect effect through a supply
chain to Europe is the shortage of hard drives and
the associated increase in price levels caused by a
severe flood event in Thailand in 2011 (Nicholls and
Kebede, 2012). Another recent event that disrupted
international trade and commodity flows was the flood
event in eastern Australia in 2010/11, which restricted
various mining activities and damaged key transport
infrastructures. This led to drastic declines in coal
( 122 ) The vulnerability score of the Notre Dame Global Adaptation Index (ND-GAIN; Chen et al., 2015) follows the outcome-based conceptualisation
of vulnerability as used by the IPCC AR3 and AR4 (see Section 1.4 for details). The index consists of 12 indicators on projected biophysical
climatic exposure (mostly for a time period around the middle of the century and the RCP4.5 scenario), 12 indicators on climatic sensitivity
and 12 indicators on adaptive capacity, each associated with six different sectors (food, water, health, ecosystem services, human habitat
and infrastructure). Another example of an indicator-based global assessment is the World Risk Index (Birkmann and Welle, 2015; Welle and
Birkmann, 2015).
290 Climate change, impacts and vulnerability in Europe 2016 | An indicator-based report